The U.S. chipmaker Micron Technology Inc. (MU) will be working this year in a rising demand for semiconductors. The stagnation period in 2019 and the COVID-19 strain in 2020 will end, and optimistic trends will return to the industry.
3 Tiny Stocks Primed to Explode
The world's greatest investor — Warren Buffett — has a simple formula for making big money in the markets. He buys up valuable assets when they are very cheap. For stock market investors that means buying up cheap small cap stocks like these with huge upside potential.
We've set up an alert service to help smart investors take full advantage of the small cap stocks primed for big returns.
Click here for full details and to join for free
Sponsored
Global shipments of chips will rise by 8.4 percent to $469 billion in 2021, according to World Semiconductor Trade Figures. In 2020, growth was 5.1 percent, to $433 billion, for comparison, and in 2019, revenue dropped by 12 percent, to $412 billion.
UBS bank economists expect still more growth next year: 12 percent to $492 billion, and growth of 7 percent to $439 billion this year. The industry’s development is driven by the continuing technical developments associated with the advent of 5G connectivity, artificial intelligence, and machine learning. New chips are required for both of these regions, which is a driver for the respective producers.
Micron Technology is deemed by UBS to be the safest way for business investment in 2021. The company is one of the pioneers in electronics and manufactures common memory chips used everywhere: from miniature IoT devices to smartphones and data centers.
Investment company Evercore ISI predicts that the semiconductor cycle’s upward trajectory is just beginning, and the semiconductor industry’s revenues will grow by 14% to $500 billion next year.
The recent shortage in the chip sector, which suggests an excess of demand over supply, favors growth. Around the same time, investors need to bear in mind that the shares of several firms are now taking into account the growth prospects of 2021 in their valuation.
These prospects raise the need to revise the company’s midterm prospects which Citi Research has recently addressed. Citi analyst Christopher Danely boosted the stock’s recommendation with a double lift from a previously “Sell” to a “Buy” now. The analyst also raised the target price from $35 to a seemingly more realistic $100. This conforms with the stock’s potential at a time when the S&P 500 came to be rising nearly 9% over the past 3 months against the gain of more than 63% the company has made while the PHLX Semiconductor Index risen by 25% in that period.
The assigned target implies a mid-term growth margin of about 26% for the stock while, in the coming days, there might be some more analysts revising their recommendations too.
Micron Technology, Inc. (MU) increased to $79.11, up +2.59 percent on Thursday
